------------------------- Via Workers World News Service Reprinted from the June 3, 2004 issue of Workers World newspaper -------------------------
HOW TO BUILD A LOW-WAGE EMPIRE: BRIBES, BULLYING & GOVERNMENT SUBSIDIES
By Milt Neidenberg
Wal-Mart is today both the world's largest corporation and its largest employer, with more than 1.2 million workers. The Walton family dynasty harkens back to an infamous past. The Waltons are a 21st-century version of the robber barons of the past--the Rocke fellers, Morgans, DuPonts and Mellons.
The five Waltons, whose personal assets of $20.5 billion each total more than $100 billion for the family, are tied for sixth place in the Forbes ranking of billionaires. Their total wealth is twice that of the Gates family, number one on that list.
Helping them arrive at this pinnacle of wealth is a trail of government decisions and subsidies in their favor that has recently been exposed.
An article in the New York Times of May 24 reports that "Wal-Mart Stores collected well over $1 billion in state and local government subsidies during its decade-long expansion from a regional discount chain to the world's largest retailer." The article is based on a report by Phillip Mattera, research director of Good Jobs First, who compiled it with financing from the United Food and Commercial Workers union.
Mattera cites numerous abuses inflicted by Wal-Mart as soon as it takes over an area suitable for its retail stores and sprawling distribution centers. "The low wages paid by Wal-Mart and the downward effect that has on wages at other retail operations, its negative effect on small businesses in the communities where it locates and its contribution to urban sprawl and traffic raise serious questions about the value of giving it sizable financial incentives to expand," concluded Mattera.
SUBSIDIES BASED ON BRIBES AND BULLYING
Nevertheless, these financial incentives have poured into the mega- company. It has bullied and bribed state governments and municipalities to extract millions in tax relief and other subsidies. Wal-Mart has more than 2,900 stores and 91 distribution centers in the United States. It has received tax refunds, credits and all types of subsidies to finance its expansion.
Tax-exempt bonds? Granted. Low-interest-rate loans? Fine. Politicians gave this behemoth anything it asked for. They built roads and other infrastructure developments at taxpayers' expense. Whatever Wal-Mart demanded to finance its operations, it got. And where did the funds come from? They were drawn from budgets in crisis.
Of its 91 distribution centers, 84 have received a total of $624 million in subsidies--for an average of $7.4 million each. All these arrangements fatten Wal-Mart's profits.
The corporation is hell-bent on bettering its record profits of 2003-- $9.1 billion on revenues of $256.3 billion.
Wal-Mart exploits both the workers and their communities. It has shifted much of its costs to local and national governments. Its profits come at the expense of services desperately needed by low-paid workers and oppressed communities--like the workers at Wal-Mart. Their wages are so low that they have to seek assistance in the form of food stamps, medical care and affordable housing.
Now, however, the company's argument that it provides jobs and low prices is losing its appeal, although shoppers are attracted to its suburban stores.
A SIGNIFICANT SETBACK
Recently, after spending over $1 million on a high-priced advertising campaign, the corporation was defeated in a referendum in Inglewood City, Calif., in which it had sought approval to build a 60-acre supercenter. Inglewood is overwhelmingly Black, Latin@ and poor. The company had hoped to open 40 such supercenters in California over the next three to five years.
The defeat of Wal-Mart by a labor-community alliance that included small business groups is an encouraging sign. New forms of resistance to this empire can be mobilized.
Until the Inglewood victory, the United Food and Commercial Workers had been waging its struggle against Wal-Mart almost alone. Since 1990, the union has called numerous rallies and press conferences. Its cassette tapes, Internet sites and chat rooms have enabled Wal-Mart workers to talk to organizers. The union helped employees file complaints about violations of overtime pay, dangerous environments at the work place, and discrimination against women that led to class-action suits. A grand jury is still investigating Wal-Mart's criminal treatment of undocumented workers.
At best, however, Wal-Mart has had to pay a few paltry fines while it continues its criminal activities and illegal union-bashing.
Though the UFCW has had a few allies in its struggle to unionize the multinational Wal-Mart workforce, it hasn't been able to overcome the resources and political power that the company has arrayed against the union. Not one organizing campaign has been won.
Recently, John Wilhelm, president of the Hotel and Retail Employees union and now head of the recently merged Union of Needleworkers and Industrial Technical Employees, called on AFL-CIO President John Sweeney to galvanize the labor movement to confront Wal-Mart. It's a positive sign and needs to get a hearing--especially at a time when the union movement's financial resources and rank-and-file members are being mobilized to campaign for Democrat John Kerry.
WAL-MART BENEFITS FROM HIGH-TECH, LOW-PAY
From ship to shore, from warehouse to distribution center to supercenter, a revolution has occurred in the way goods are now transported and warehoused. From the moment the merchandise leaves the suppliers in giant containers on wheels, it is tagged, barcoded and tracked by computer. From the onshore warehouses to the trucks and trains, through an inter-modality process, the containers arrive at the distribution warehouses and then to the sellers of goods. It's called supply chain management, and Wal-Mart is a primary beneficiary of this technology.
These new methods attempt to solve the unsolvable: the capitalist contradiction between supply and demand that leads to overproduction.
Wal-Mart is on a messianic mission, successful up to now, to become the most exploitive corporate leader in the imperialist world. It is unsurpassed in exploiting the service-oriented, multinational workforce, primarily women. Using sheer size, market clout, access to capital and massive advertising campaigns, it is invading vast sections of the country and the world--not with the intent of building company towns, but of constructing under one roof supercenters averaging 200,000 square feet, the size of more than four football fields.
By slashing its retail prices way below cost upon entering a community, and bludgeoning its suppliers to reduce their costs, Wal-Mart is crushing competitors in groceries, pharmacies and hardware stores, as well as other retailers. It forces its rivals, willing or unwilling, to join it in slashing wages and benefits while searching the globe for sweatshop suppliers.
Unlike the 19th- and 20th-century capitalist dynasties, the Waltons have not set up factories or foundries or steel mills to exploit the workers. That early high-tech industrial revolution, fostered by the development of machinery, made possible the organization of large-scale production. The assembly line was born. It was labeled the Henry Ford revolution and employed millions of workers.
If anything, the Wal-Mart revolution is cutting out jobs while forcing down the wages and working conditions of whole communities.
The acid test for labor is how to break the economic bondage of the 1.1 million Wal-Mart workers. Inglewood is just one example of the growing resistance to letting Wal-Mart build supercenters in urban areas. In Chicago, Wal-Mart has been thwarted in its attempts to invade the city with a supercenter.
The high-tech revolution that has brought low-paid, service-oriented workers--women, undocumented and multinational--into the workforce has fundamentally changed relationships within class society. Now over 1 million workers are saddled by one giant employer. But the Waltons should remember Henry Ford, and what he said to the unorganized auto workers when confronted by an enraged industrial labor movement.
Ford said scornfully that only over his dead body would the union be allowed into his plants. The historic class struggles of the 1930s and the rise of the United Auto Workers proved how wrong he was.
The Waltons may soon face the wrath of this century's multinational, low- paid workers and oppressed communities.
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